Why Your Retirement Plan Committee Needs Quality Fiduciary Training (And How to Know If You're Getting It)
Managing a company retirement plan comes with serious responsibilities—and serious personal liability under the Employee Retirement Income Security Act (ERISA). Yet, one of the most critical aspects of successful plan management is often overlooked: comprehensive fiduciary training for your retirement plan committee.
If you're serving on a retirement plan committee, here's what you need to know about fiduciary training, why it matters, and how to tell if your advisor is truly supporting your committee's success.
The Stakes Are Higher Than You Think
Under the Employee Retirement Income Security Act (ERISA), fiduciary liability isn't corporate—it's personal. The people named as plan sponsors or retirement plan committee members are personally on the line, including their personal assets, if a breach of fiduciary responsibility occurs and they're found guilty. (Yes, the company and liability insurance can help, but that’s not the default in the law.)
Think of it this way: when you're making decisions for your retirement plan participants, approach it like you're choosing a care facility for your beloved grandmother. You'd carefully consider what's best for her wellbeing, her quality of life, her friendships, and how to make her money last. You'd consider the parameters, the many choices, and ensure the facility meets high standards for both medical care and daily living.
This same level of care and deliberation should guide every retirement plan decision, because committee members bear the legal and ethical responsibilities that come with fiduciary duties.
What Quality Fiduciary Training Should Cover
Understanding your responsibilities isn't just about avoiding legal pitfalls or risk management—it's about making prudent decisions that directly impact your employees' financial futures. Comprehensive fiduciary training should address these key areas:
ERISA Fundamentals
The main responsibilities that ERSIA lays out are the backbone for and key to understanding your duties. This legal roadmap should be the first area your retirement plan advisor should cover. These include (at a minimum):
Duty of Loyalty: Acting solely in participants' best interests
Duty of Prudence: Acting with care, skill, and diligence
Duty to Diversify Investments
Duty to Follow Plan Documents: Knowing the plan terms, policies, and procedures
Prohibited Transactions: Understanding conflicts of interest that must be avoided (and the limited exceptions to these rules)
Consequences of fiduciary breach: Fiduciaries who do not follow these principles of conduct may be personally liable to restore any losses to the plan, or to restore any profits made through improper use of plan assets
Plan Governance
Plan governance in the context of retirement plans refers to the formal structure, processes, and procedures used to oversee and manage a retirement plan effectively. It's essentially the "how" of running a successful retirement plan committee and ensuring fiduciary responsibilities are met.
Committee structure and organization: How is the committee formed and what are the operating rules
Documentation: If it's not documented, it didn't happen—this is your defense
Oversight Procedures: Regular plan reviews and accountability measures
Meeting Management: How to run committee meetings effectively
Accountability Measures: Metrics for evaluating plan success
Paying Only Reasonable Fees: Metrics for evaluating services and cost
Investment Management Responsibilities
We covered a number of these in our previous blog post Investment Menus: What to Expect from Your Retirement Plan Investment Advisor, but from an investment fiduciary and high level strategy standpoint, these three should be included in training:
Evaluating investment options and their risks
Selecting and monitoring plan administration
Understanding your ongoing oversight duties
Day-to-Day Operations
Many committees can be caught off-guard by operational failures. This stems from not understanding the day-to-day operations of the plan, but also what is being carried out and by whom. Fiduciary training should aim to cover:
ERISA requirements for notices and delivery
Ensuring responsible parties fulfill their roles
Guaranteeing employees receive timely information
Best Practices and Industry Trends
Compliance is just the starting point – that’s table stakes. What committees ought to strive for is excellence and plan optimization. This requires training in:
Learning from successful plan committees
Participant outcomes
Understanding current lawsuit trends
Staying current on regulatory changes and how they affect the plan
Adapting to evolving industry standards
Red Flags: When Your Advisor Isn't Meeting the Mark
Since best practices and regulations constantly evolve, quality fiduciary training is never "one and done." Here are warning signs that your advisor may be falling short:
Inadequate Training Approach
Generic content: Cookie-cutter PowerPoint presentations that aren't tailored to your specific plan
One-time training: Initial training years ago with no follow-up or updates
Overly technical delivery: Excessive legalese and acronyms that committee members can't understand
No documentation: Failure to record what training was provided
Reactive Rather Than Proactive
Waiting for you to request training instead of staying ahead of changes
Focusing solely on investment performance while neglecting governance and compliance
No systematic approach to onboarding new committee members*
*Side note: what you do not want is new committee members relying solely on current committee members for learning the ropes. There is too much room for error or misunderstanding of what responsibilities are in addition to it being a poor use of time.
Poor Follow-Through
No ongoing support or resources after training sessions
Inability to answer follow-up questions
Lack of customization based on your plan's specific challenges and opportunities
What Excellent Fiduciary Training Looks Like
A top-notch retirement plan advisor will provide training that goes well beyond one-time presentations or generic content.
Proactive and Consistent Schedule
Excellent advisors provide annual training at minimum, with additional sessions whenever there are regulatory changes or new committee members joining. They stay ahead of industry developments rather than simply reacting to them, ensuring your committee is always prepared for what's coming next.
Customized Content
The best training is specific to your plan, your investment policy statement, and your current challenges. Rather than generic presentations, quality advisors use your plan's actual data and examples to make the training relevant and actionable. They address your unique risks and opportunities instead of offering one-size-fits-all solutions.
Interactive and Engaging Delivery
Effective training uses clear, understandable language without excessive jargon that confuses committee members. Top advisors offer multiple delivery formats such as videos, check-ins, and workshops, incorporating interactive elements that are respectful of committee members’ time, keep everyone engaged, and ensure the information sticks.
Comprehensive Documentation
Quality advisors provide detailed records of all training provided, creating easy-to-file documentation for your plan records. They maintain clear notes on topics covered and decisions made, giving you the documentation trail that is essential for demonstrating prudent fiduciary behavior.
Ongoing Support
The best advisors don't disappear after training sessions end. They provide resources and tools for follow-up questions, regular updates on new regulations and industry trends, and focus on building knowledge over time rather than treating training as isolated events.
Take Action: Assess Your Current Situation
Use these assessment questions to evaluate the quality of fiduciary training and support your committee is receiving:
When did we last receive fiduciary training?
Can all committee members clearly explain their fiduciary duties and how the committee runs?
Do we feel confident making fiduciary decisions?
Does our advisor proactively bring us regulatory updates and best practices?
Has our advisor documented all training sessions?
Do we have a process for training new committee members?
Are all members operating with the same knowledge level?
Would our actions withstand a fiduciary audit?
Can we articulate how we regularly evaluate service providers and other aspects of our plan?
If you're answering "no" to multiple questions, it's time to evaluate whether your current advisor is truly serving your committee's needs.
The Bottom Line
Fiduciary training isn't a luxury—it's a fundamental service your retirement plan advisor should provide. It safeguards your plan, protects your participants, and ensures you as fiduciaries are properly protected with the documentation to prove your prudent decision-making process.
A truly excellent retirement plan advisor understands that their role goes far beyond investment advice. They serve as your trusted educational partner and subject matter expert, helping your committee fulfill its duties effectively and confidently.
Remember: it's your duty to monitor all service providers, including your advisor. If you recognize any of the red flags discussed here, that's a strong indication it's time to have a serious conversation—whether with your current advisor about stepping up their game, or with potential new advisors who can better serve your committee's needs.
Your employees' financial futures depend on the decisions you make today. Make sure you have the training and support necessary to make those decisions with confidence and competence.
For answers on retirement plan management and fiduciary responsibilities questions, reach out to us at retirementplanology.com/ask-us or connect with us on LinkedIn.